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Greens agree with IMF on wealth fund

Colin Brinsden, AAP Economics Correspondent

The Australian Greens will continue to pursue the establishment of a sovereign wealth fund, which again has been suggested by the International Monetary Fund (IMF).

In its Regional Economics Outlook for Asia and the Pacific released on Thursday, the IMF again urged the federal government to consider saving some of the revenue generated by higher commodity prices.

Treasurer Wayne Swan has previously dismissed calls for a sovereign wealth fund, saying there are already eight million in the country in the form of superannuation accounts.

But the IMF says saving the boosted government revenues would ensure a more equal distribution of its benefits across generations and reduce long-term fiscal vulnerabilities from an ageing population and rising heath care costs.

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The Greens agree.

Acting Greens leader Christine Milne said that while past and current governments are intent on spending the spoils of the mining boom, the Greens will continue to pursue a sovereign wealth fund in the coming year in parliament.

"A sovereign fund is the gift that keeps on giving, allowing Australia to begin vital nation-building," Senator Milne said in a statement on Friday.

"John Howard and Peter Costello (the former prime minister and treasurer) squandered the `rivers of gold' and `manna from heaven' in the mid-2000s with tax cuts in spite of the need to oil-proof and climate-proof the nation."

She said that if Australia is to build vital national infrastructure, such as high-speed rail between its capital cities and fast, efficient light rail within all its cities, this is a "heaven-sent" opportunity.

"Both the old parties are squandering the boom by allowing much of the profits to flow out of the country. Australia should be investing some of the mining profits in its future well-being."

But opposition finance spokesman Andrew Robb says the IMF's call to establish a sovereign wealth fund was futile until Australia pays off its "mountain of debt", which continues to grow by close to $1 billion a week.

"In any event, Australia already has a sovereign wealth fund - the Future Fund, established by Peter Costello - which is reportedly the 10th biggest sovereign wealth fund in the world now worth nearly $75 billion," Mr Robb said in a blog posted on Friday.

The Future Fund was set up by the former government to cover future public servant superannuation liabilities.

All the functions of a sovereign wealth fund can be incorporated within the Future Fund, "if considered desirable", Mr Robb said.

"But much of this is academic until the likely $100 billion-plus net government debt is repaid."

If anything, the IMF has unwittingly exposed the inconvenient truth for Labor, he said.